Peggy Dold’s Post

Spotify will pay songwriters and publishers an estimated $150 Million less in U.S. mechanical royalties in the next twelve months, according to my math. Multiple sources I spoke to also found similar numbers. 💬 Why? By adding audiobooks into Spotify’s premium tier, Spotify now claims it qualifies to pay a discounted “bundle” rate to songwriters for premium streams, given Spotify now has to pay licensing for both books and music from the same price tag. 💬 How did I find this? This estimate of lost value for the next year was found by comparing what 2024 payouts were projected to be for U.S. mechanical royalties if this change never happened weighed against projected payouts for U.S. mechanical royalties that are now projected under the bundling discounts. 💬 Can you opt out? Eventually, Spotify says it will roll out a music-only subscription. if you manually switch to that, your streams will count towards these royalties the old fashioned way. Unfortunately bundling kicked in in March, all premium users are automatically on it, and the music-only option isn't available yet. Learn more below:

Interesting figures coming from Billboard. With major record companies (Universal Music, Warner Music) and streaming platforms (Spotify, Deezer) saying publicly that they are pushing for a price increase in streaming subscriptions to increment the value of music, it seems contradictory to see strategies like bundling music and audiobooks. These will have the opposite effect, reducing royalty payments to artists, composers, authors and other rightsholders. "Even though the price of Spotify premium is rising, that additional revenue does not benefit songwriters and publishers. Now that premium is considered a bundled service with audiobooks, some of the subscription price is owed to book publishers and authors to license their works, too. Mechanical revenue for bundles is calculated by seeing what audiobooks are valued at as a standalone offering ($9.99) and weighing that against the price of the premium bundle offering ($10.99), according to Phono IV. The value of music is found by dividing the total premium price ($10.99) by the two services (audiobooks only and premium) together ($21), which results in music being valued at about 52% of the total bundle, or around $5.70 per subscriber." #Music #Artists #Royalties #RoyaltyPayments #Bundle #Audiobooks #Spotify #Streaming

Spotify Faces NMPA Backlash Over Audiobook Inclusion in Premium Plans Spotify has come under fire from the National Music Publishers' Association (NMPA) for its recent decision to include audiobook content in all paid subscription plans. The NMPA accuses Spotify of using this tactic to boost profits, mislead consumers, and undermine the music royalty system. Last year, Spotify announced the addition of 15 hours of audiobooks to all Premium plans, alongside a separate audiobook-only subscription priced at $10 per month. The NMPA claims that these changes have resulted in higher subscription fees, leaving customers with no choice but to switch to the free, ad-supported tier. Notably, the NMPA's complaint to the Federal Trade Commission (FTC) estimates that Spotify could pay $150 million less in music royalties in the first year of these new bundled plans. Furthermore, the NMPA argues that the audiobook-only plan is a "sham," as it costs only $1 less than the full Premium Plan despite offering the same audiobook content. The impact of this controversy on Spotify's proposed changes to its royalty model remains uncertain. Both artists and publishers have consistently criticized the streaming giant and the broader streaming ecosystem for their inadequate compensation to music creators. # Thank you Luciana Santos for your submission!

The National Music Publishers Association (NMPA) and the Association Of Independent Music Publishers (AIMP) are actively opposing Spotify's plan to bundle audiobooks with its premium subscription, which could lower royalties for songwriters. AIMP has shifted its demand from user opt-out instructions to automatic opt-in, aiming to protect songwriter earnings. Spotify's move to classify its premium subscription as a bundle under US compulsory licensing could lead to an estimated $150 million in revenue loss, sparking legal considerations from NMPA and criticism from AIMP. The music community, supported by authors, is rallying against Spotify's bundling strategy, advocating for fair compensation and transparent subscription options. #spotify #musicpublishers #nmpa

So many have asked me about Spotify paying songwriters less in their new audiobook bundle. Here's what's happening: When Spotify was first launching they wanted to market different plans to help attract subs: Family plans, student plans, etc. These were called "bundles" and they are very common in any digital subscription, music or otherwise. Rightsholders (incentivized to help Spotify grow) gave a royalty break on these bundles. If you had a family of four using the service at $14.99, you can't pay out the agreed rate for four people on that subscription price. You'd be losing money on that consumer. Fast fwd to today. How a "bundle" is defined in the deals is somewhat open to interpretation. It can be a plan where there is more than one user on the same sub, or if one user has signed up for more than one feature. So Spotify introduces audiobooks & new subscription tiers around it: - $9.99: just audiobooks - $10.99: just music & podcasts - $11.99: music, podcasts & audiobooks This third $11.99 tier is now considered a "bundle" by Spotify since audiobooks are a new feature. And they are claiming 50% of the sub revenue should go to the audiobook portion, and not music. And since the music publishers are paid based on a percent of revenue for *music*, the pool of money coming in from subscribers that will now go to music has gone from 100% of $10.99 (current price) to 50% of $11.99 )new price). This is controversial, and it's worth noting it's only in the United States. Other territories have much more delineated rules around digital & music subscriptions and how rights holders should be paid. So the National Music Publishers' Association will contest this and it will be decided in court. But what's at stake is hundreds of millions of $$$ - either going back to songwriters, or to Spotify's bottom line. #musicindustry #musicbusiness #streaming

Spotify, the music streaming giant, is raising prices again. This is the second time in one year they've upped the price of their premium subscriptions. Spotify claims it's to remain profitable and fund their addition of audiobooks to the app. With rising prices everywhere you turn, does Spotify stay on the list of must-have subscriptions? Read more here: https://lnkd.in/gFrBmePh #availmarketing #digitalmarketing #socialmediamarketing #digitalmarketingexpert #socialmediastrategy #marketingdigital #shapingstoriesintosuccess #spotify #marketingnews

NEW: The NMPA has filed a complaint with the FTC against Spotify for bundling in audiobooks to its premium subscription tiers. This is the first time the NMPA has involved the Federal Trade Commission in its battle with a tech company. The letter reads: “The [NMPA] writes to urge the FTC to address unlawful conduct by Spotify that is harming millions of consumers and the music marketplace… Spotify has deceived consumers by converting millions of its subscribers without their consent from music-only subscriptions into ‘bundled’ audiobook-and-music subscriptions, publicly announcing increased prices for those subscriptions, failing to offer an option for subscribers to revert to a music-only subscription, and thwarting attempts to cancel through dark patterns and confusing website interfaces. This bait-and-switch subscription scheme is “saddling shoppers with recurring payments for products and services they did not intend to purchase or did not want to continue to purchase.” https://lnkd.in/gRyskist

Everyone should read Adam Parness's op ed in Billboard about the fight between Spotify and the music publishing community. Some highlights: 1. Spotify's interpretation of a "bundled sub" is quite aggressive and not in the spirit of the agreement (Phonograph IV) 2. It's telling that the music + audiobook tier is *only* available in the US, where Phonograph IV has jurisdiction. 3. Songwriters are estimated to be short approx $150M USD if Spotify's way stands #musicbusiness #musicpublishing #streaming #musicindustry #spotify